Personal finance is a funny subject. It’s something that every full-functioning adult needs to deal with throughout their life… and yet, we find it harder to talk about than religion and politics. It’s taboo.

Well, enough of that, alright? You’re shooting yourself in the foot by keeping all of your personal finance details bottled up inside, especially if you’re keeping them from your significant other. Here are four topics you should both absolutely be 100% transparent about.

You Debt Situation

When you get married, your debt becomes a team problem, not an individual one. If you have mountains of debt, you need to be upfront about it with your partner. The most important thing when it comes to paying down debt is to have a game plan, and it’s impossible to plan appropriately when you’re keeping things from your spouse.

Keeping your debt a secret can erode trust in the relationship when it finally comes to light, and make no mistake… it will come out eventually, whether you like it or not. Read on to find out how.

Your Credit Score

Yep, here it is. Your debt affects your credit score. Have you maxed out you credit? Missed payments? Opened too many credit cards? All of these things can ding your credit, and while you might be able to keep it secret for a while, you shouldn’t.

Not just because it’s wrong, but also because, when you go to buy something like a house or condo together with your significant other, the lender will look at your credit situation. If your credit is bad, it’s going to come up in discussion when you’re turned down for a loan… and wouldn’t you rather your spouse find out from you, versus some random mortgage guy sitting across the desk?

Your Salary

The flipside to your debt situation is your income situation. It’s impossible to know what you can afford and what you can’t if you don’t know each other’s’ salaries… you know, unless you’re a billionaire or something, in which case, why are you reading this blog?

The bottom line is that talking about your incomes gives you another major piece of the puzzle when it comes to understanding what you can afford today, what you can be saving for tomorrow, and what you might need to prepare for into the future. Here’s what I mean by that.

Estate Planning

Nobody wants to talk about dying. It sucks, I get it. But we’re all gonna go at some point, so I’m not really sure why we’re all so against the subject. Here’s the thing: if both you and your significant other work, chances are you’re relying on both your incomes to make ends meet… right?

Right.

So if that’s the case, then what happens if one of you gets hit by a bus tomorrow? How is the other one going to pay the bills? Talking about your salaries and the concept of death lets you answer that question definitively. Here’s how.

When you know each other’s salaries, you know how much money you are depending on your significant other to bring in each month. From there, you can do some quick math (or find a reputable insurance agent to do it for you) to figure out how much life insurance you need to have on yourself and your spouse so that, if you were to die, they’d be ok financially.

Let’s look at a quick example. Say Bobby brings home $3,500 after taxes each month, and Becky brings home $3,000. Let’s also say for simplicity’s sake that they each need that full amount to get by. One way to plan for death in this situation is to think about how much life insurance you would need in order to be able to replace the other person’s income.

To get that number, let’s assume you can earn 4% on your money. In order for the investment to pay out Bobby’s take-home pay of $3,500 then, you’d need to have coverage of $1,050,000. That amount invested at 4% a year gives you $42,000 annually, or $3,500 a month. For Becky, the amount of insurance she would need is $900,000. It sounds like a lot, but you’d be surprised at how reasonable term policies (the only type of life insurance you should be considering) can be if you’re in good health.

Here’s the thing though: all of this is moot if you don’t talk about your salaries. You see how this all fits together?

Wrapping it Up

Almost half of all Canadians don’t have a financial plan in place, and it’s no wonder why. When you don’t talk about these topics with your significant other, how can you possibly expect to be able to plan effectively?

The first step to building a financial plan is to break the taboo; it’s time for full disclosure. Get your dirty laundry out on the table, and friggin’ talk it out. Once both of you have the full picture of your collective situation, you’ll be able to start figuring out the best way to go about improving it. Now get talking!

What other financial taboos can you think of that people should talk more about? Share them with me in the comment section!